The EB-5 program was developed
to encourage foreign investment in the United States
in order to stimulate the local economy and provide
jobs to United States residents and citizens. It
provides permanent residency (green card) to those
who invest the required amount of money and meet the
remaining conditions of the program.
The initial application is processed in 3 to 12
months. If approved, the applicant is granted
conditional permanent residency for a period of 2
years. Toward the end of the two year period, the
applicant may file an application to convert the
conditional residency to a permanent status.
PROGRAMS AVAILABLE
The EB-5 program offers three different
investment vehicles:
- TEA (Targeted Employment Area) or RA (Rural
Area). The investment must be made in an area
that is determined to be economically depressed
(TEA) or within a specified rural area (RA). The
investment threshold is $500,000 per investor.
- Outside TEA or RA. This investment is made
in any area outside a TEA or RA area. However,
the investment threshold is $1 million per
investor.
- Regional Center Program. This investment is
made in enterprises that have been approved by
the federal government. This program provides
certain advantages over the other two programs.
The investment can be either $500,000 or $1
million per investor, depending upon the program
chosen, but the investment must be in a
pre-approved enterprise. One of the best
advantages of the Regional Center Program is
that the requirement regarding the creation of
jobs is easier to meet.
REQUIREMENTS
- Invest the requisite capital amount
($500,000 or $1 million, depending upon the
program chosen).
- Investor must be an active participant in
the operation of the business. Merely being an
investor is not enough, except for investments
in the Regional Centers where the investor will
not have any significant active managerial
roles.
- The investment must create an original,
“new” business, rescue a troubled business
(strict requirements apply), or reorganize or
restructure an existing business into a new
commercial enterprise.
- The investment must be from a lawful source
of funds. This can often be a difficult
requirement to meet as the actual source of
funds must be proven, not simply that they
currently exist in a bank account.
- The investment capital must be at risk.
There can be no guaranteed redemption agreement
or a redemption agreement that begins prior to
the end of the 2 year period of conditional
residency.
- The investment enterprise must create at
least 10 full time jobs (directly or indirectly)
by the end of the two year period. The advantage
of the Regional Center is that such job creation
has already been determined favorably by the
government as part of the approval process.
MISCELLANEOUS
Legal and administrative expenses for the initial
process may run as high as $60,000.00 for various
Regional Centers, but may run less if you establish
your own business and can control the administrative
expenses. Once the investor qualifies for a green
card in this manner, spouse and children under age
21 are also eligible for residency and generally
obtain it at the same time as the investor.
There are currently over 75 different approved
Regional Centers. Choosing the right center that is
the best fit requires due diligence on the part of
the investor, as centers vary considerably in
location, expected rate of return, risk associated
with the investment, and history of successful EB-5
applications.
This information is for general explanatory
purposes only and should not be relied upon as legal
advice. Receipt of this information does not
constitute the establishment of any attorney -
client relationship, nor is it intended to be an
endorsement or recommendation of any kind
|
